Once the fraudster has obtained your personal information, he or she will then register fake documents to transfer the property to themselves, and either sell the property or register a new mortgage in their name.

Mortgage fraud

Mortgage fraud can occur in two ways. It can occur in the title fraud way in which a fraudster steals your identity and then poses as you to get a new mortgage on the title and then leaves with the cash while you are responsible for payments.

However, the person who owns the property for which he or she is taking out the mortgage commits another type of mortgage fraud. Some people may not even be aware they commit mortgage fraud.

This type of mortgage fraud is defined as deliberately misrepresenting information to receive mortgage financing that would not have been approved if the lender would have known the truth.

Examples of misrepresenting information include:

Misrepresenting the amount and/or source of your down payment;

Claiming you are a full-time, salaried employee if you are really part-time, on contract and/or self-employed;

The fraudster will often impersonate a property manager, real estate agent or landlord/owner. Often the scammers get the property information off the MLS site.

Usually the scammer asks you to meet him or her away from the property, at another location, where keys are going to be exchanged, a tenancy agreement will be signed and most importantly to the scammer, and they will collect your rental deposit.

A person often finds out they’ve been scammed when they arrive at the property and find it’s already occupied.

What can I do if I’ve been the victim of real estate fraud?

Most people who own property in Canada have title insurance purchased for them by their real estate lawyer. A title insurer will often insure against certain types of real estate fraud, such as title fraud. If you have been the victim of real estate fraud contact your title insurer and see if you are covered for it. Regardless whether you were victim of a rental scam or a mortgage/title scam, you should inform your local police department and the Canadian Anti-Fraud Centre.